2024-06-03 00:53:58
“A systemic pension reform should and can happen. In the meanwhile, the pension system is benefiting enormously from the unexpectedly good dynamics within the labor market.
We see higher participation of individuals within the labor market, quicker wage progress within the brief time period. However getting old cuts by way of it, and it does so noticeably. As a result of this 12 months would be the first 12 months when extra folks will retire than enter the labor market”, stated B. Garcia on Friday, throughout the seminar “Macroeconomic Challenges in Lithuania: Strengthening Competitiveness and Resilience”.
“You’ll have fewer and fewer staff to pay for the rising variety of retirees.” Due to this fact, such a system will be capable of operate solely by paying out insufficient advantages or by transferring massive quantities of funds from the finances, which might be problematic,” he added.
The top of the IMF mission in Lithuania observed that 2026 may also contribute to this downside. expiring extension of retirement age. The consequence of this, in accordance with him, would be the shrinking surplus of “Sodra”. “In 2026 the top of the rise within the retirement age will put strain on Sodra, and over time the excess it collects now will start to say no sharply,” he defined.
Based on B. Garcia, one of many measures that might stabilize this example is the second stage. He emphasised that sooner or later, the pensions of those that don’t save within the second tier could start to lower in comparison with the wages acquired whereas working.
“The second tier will compensate for this decline. Sooner or later, it won’t enhance the quantity of remuneration that the pension will attain, however will be certain that it doesn’t lower,” he asserted.
He claimed that with a purpose to scale back the quantity of pensions for as few folks as potential, the second tier needs to be strengthened, and early exit from financial savings needs to be restricted.
“The second tier of pensions needs to be strengthened and stabilized. Participation needs to be inspired. And withdrawal needs to be as restricted as potential. After all, we perceive that it might be unconstitutional to ban it,” stated B. Gracia.
ELTA has already introduced that the Constitutional Courtroom (CT) determined that the restricted chance to withdraw from pension accumulation funds supplied for within the Pension Accumulation Legislation violates the Structure. At the moment, in accordance with the establishment, various kinds of funds primarily based on the quantity of amassed property don’t violate the primary legislation.
The appropriate to funds amassed in pension funds, in accordance with the CT, is said to the safety of his property rights, subsequently the prevailing regulation has no foundation. The CT discovered that the likelihood for folks to terminate the pension accumulation contract for necessary causes, which is at present not supplied for within the legislation, is opposite to the Structure. Within the opinion of KT, this restricts the possession rights of the pension fund participant.
After the choice of the Constitutional Courtroom, the Social Democrats proposed to permit withdrawal of funds amassed in pension funds for necessary causes.
Based on the amendments to the Legislation on Pension Accumulation registered within the Seimas, they suggest to present the contributors of the second stage pension the chance to obtain a profit in the event that they themselves or their relations fall in poor health with a critical sickness, in addition to within the occasion of the loss of life of a liked one, in case of incapacity or lack of working capability, if needed, dental prosthetics, in addition to within the occasion of a pure catastrophe. in case of lack of housing owned by the proper of possession and related instances.
2024-06-03 00:53:58